Finance Minister Arun Jaitley on Tuesday said that to counter domestic black money, the Centre will make it mandatory to furnish PAN (Permanent Account Number) for cash dealings above Rs. 2 lakh.

The Revenue Secretary, Hasmukh Adhia, said later in the evening that the Finance Ministry has changed the reporting requirements of PAN, making it mandatory for all transactions of overRs. 2 lakh effective January 1, 2016.

“This will include transactions through cash, cheque and jewellery,” he told newspersons.

In Budget 2015-16, Jaitley had proposed making PAN mandatory for all transactions over Rs.1 lakh, but Adhia said it has been revised upwards to “give some breathing time to people” based on discussions with stakeholders.

The Central Board of Direct Taxes has also amended the reporting requirement of PAN for other specified transactions. “Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity,” said an official release.

Immovable property
Starting from the New Year, quoting of PAN will be mandatory for all transactions of immovable property of over Rs.10 lakh, from the earlier threshold of Rs.5 lakh. It will also be required for all term deposits of over Rs.50,000 in not only banks but also in co-operative banks, post offices, nidhis, and non-banking finance companies. Further, PAN will also be mandatory for opening an account (except basic account) in any bank, including cooperative banks.

Cash payments to settle hotel bills and for foreign travel, such as purchase of tickets or buying foreign exchange of over Rs.50,000, will also require quoting of PAN, Adhia said, adding that the earlier limit was Rs25,000.

Opening of demat accounts, buying shares of listed companies which are worth more than Rs.1 lakh, or purchasing debentures, RBI bonds, life insurance policies, and mutual funds of over Rs.50,000 will also require PAN.

Quoting of PAN has also become compulsory for purchase of gift cards or cash cards of over Rs.50,000 Adhia said, adding that PAN will no longer be required for installation of telephone or cell-phone connections.

Our Bureau
This article was published on December 15, 2015, in Business Line (The Hindu)